New measures on waste disposal introduced this year under Part III of the Finance Act 1996 have extended operator liabilities that extend beyond landfill sites to include any site where an illegal deposit of waste has occurred. For contractors and developers involved in construction projects where there is the potential of producing waste materials intended for site re-use, for example through soil remediation, interpreting the new regulations is vital, with failure to comply incurring significant penalties.
The new legislation stems from the increased abuse by operators reusing materials without the relevant exemptions or permits in place, normally associated with badly managed landfills or poorly controlled excavations.
Introduced not only to tighten up on such instances of waste disposal but also to bring clarity to what material is taxable, the new rules can nevertheless pose a pitfall for the unwary, despite provisions to protect those who transgress the rules unknowingly.
Are you affected by the changes?
At sites with a permit, all material disposed of will be taxable unless expressly exempt. New exemptions have been introduced so that Landfill Tax is not charged at permitted sites on material currently outside the scope of the tax. The Environment Agency has a number of exemptions (such as an U1) which can be implemented to allow the reuse of suitable material. Notification requirements have also been removed for certain activities undertaken on permitted landfill sites. Notwithstanding, in practice, the past few years have seen reductions in the volumes of material covered under these exemptions, with significant limitations on the re-use of the materials. New liabilities introduced by the latest changes to landfill tax include waste generated in pile and trench arisings, general excavation/cut and fill, placement of piling mats and/or construction platforms.
Counting the cost
Any construction site where there is an illegal disposal of waste is likely to be liable for landfill tax. With the current rate of landfill tax at £88.95/tonne the sums that may be due to HRMC can amount to thousands of pounds, with the potential for additional penalty costs of up to 100% of the tax due. All parties involved could also be liable to penalties for non-compliance or face criminal prosecution, with further ramifications arising from loss of reputation.
Proof of compliance
Avoiding HMRC tax bills requires that materials for re-use can be defined as not being a waste material. The industry guidance Definition of Waste Code of Practice (DoWCoP), produced by Contaminated Land: Application in Real Environment (CL:AIRE), an organisation which has been at the forefront for sustainable contaminated land development, offers a working framework for operators in ensuring compliance with the disposal of waste material. A robust process supported by the Environment Agency, the fundamental concept of the DoWCoP is that it provides a mechanism to demonstrate that excavated materials satisfy ‘the end of waste’ test and consequently should not incur any landfill tax duties.
Exemptions such as the U1 are simpler to implement but still require the relevant documentation to be in place prior to any on site re-use.
The best way to avoid liability is to engage at an early stage with a specialist who can provide advice on the best correct procedures to adopt, help ensure that the correct protocols are in place during initial site investigations and soil remediation through to re-use in development and remain compliant throughout the project.
Read more about the changes in landfill tax (link to article online – Ecologia to supply link)
For more information on Ecologia’s site remediation services click HERE.
What are your experiences on working with the new landfill tax regulations? Share your views and tips.
Giacomo MainiManaging Director
+44 1795 471611
Ask me a question
Leigh Anne CammackDirector
+44 1795 471611
Ask me a question